6th April 2024
- Published
06 April 2024 -
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GCC’s ‘Vision for Regional Security’
Context
The Gulf Cooperation Council (GCC) announced the launch of its 'Vision for Regional Security', a new initiative formulated by the six-country bloc earlier.
1: Dimension-Issues covered in the Vision
- There are several topics that the vision covers, outlined in 15 specific points, such as issues relating to regional security and stability, economy and development, as well as climate change.
- One such geopolitical challenge that the vision seeks to resolve is the issue of Israel's occupationof the Palestinian territories, reaffirming the GCC's commitment to the Arab Peace Initiative that was first endorsed by the Arab League in 2002, despite Bahrain and the UAE normalising relations with Israel.
- The vision also calls for the end of Israeli settlements in the occupied West Bank and nots that the conflict is a key issue destabilising the region.
- It also addresses nuclear non-proliferation in the region, a long-standing issue due to Iran's nuclear programme, as well as a commitment on the right to civil nuclearuse, a policy which has been sought by both the UAE and Saudi Arabia.
- Among others, it calls for a two-State solution, the withdrawal of Israeli forces to the pre-June 1967 borders and the establishment of an independent Palestinian State with East Jerusalem as its capital.
- Other points include addressing cyber security issues, global energy market stability, climate change and the advancement of implementing a 'circular carbon economy' and securing water security.
The document has come at a time when the West Asian region is engulfed in a turmoil since the beginning of the Israel–Hamas War in October 2023. Its launch has provoked questions about what the security plan entails and how it will be implemented, particularly with its formation coinciding with Israel's war on Gaza and a spate of attacks on regional Red Sea shipping.
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Fact Box: Gulf Cooperation Council (GCC)
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India’s One Airspace Idea
Context
Context
India is planning a major move to unify its four Flight Information Regions (FIRs) in Delhi, Mumbai, Kolkata and Chennai, into one continuous airspace in Nagpur and have harmonized Air Traffic Management from Nagpur which has a unique central location in the country.
1: Dimension- Persistent Challenges in air traffic management
- Inefficient air traffic management exacerbates congestion issues and compromises flight safety. India's airspace is fragmented, with multiple air traffic control (ATC) authorities responsible for different regions, leading to coordination challenges and suboptimal routing.
- Skies are already capacity-crunched and are set to become even more so with the advent of new airspace users such as electric vertical take-off and landing aircrafts (eVTOLs).
- Managing increased volume of airborne vehicles efficiently, while maintaining or even enhancing safety and avoiding congestion, represents a significant challenge.
2: Dimension- Impact of the move
- The single continuum Flight Information Region (FIR) would yield a lot of benefits in terms of safety, efficiency, user satisfaction, reduced carbon footprint and optimum manpower utilization.
- Indian Single Sky Harmonized Air Traffic Management at Nagpur (ISHAN) is expected to reduce separations (between flights) and have more fuel-efficient flight paths for aircraft.
- The unification aims to streamline and enhance air traffic management (ATM) operations in the region.
- If this plan is implemented, the air traffic controllers of every area control would not be required to coordinate for domestic flights flying above 25,000 ft (flights in the upper airspace) as they would all be handled by Air traffic controllers (ATCOs) in Nagpur.
- The ATCOs in every region or airport would then only work to guide the flights approaching or taking off from an airport until it enters the upper space which is referred to as ‘Area control’ in aviation parlance”.
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Fact Box: India’s Airspace
Rights over Airspace
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India’s Mineral Production
Context
The index of mineral production for the month of Feb 2024 was 139.6, which is 8.0% higher as compared to the level in the month of Feb 2023. The cumulative growth of this index for the 11-month period of April–Feb of FY24 over the corresponding period of the previous year was higher by 8.2%.
Key Highlights
- Some of the non-fuel minerals showing positive growth during the month of Feb 2024 as compared to the corresponding month of the previous year are Bauxite, Chromite, Copper Concentrate, Gold, Zinc Concentrate, Manganese Ore, Phosphorite, Diamond, Graphite (R.O.M.), Limestone, Magnesite, etc.
- Iron ore and Limestone together account for about 80% of the total MCDR mineral production by value.
- In the non-ferrous metal sector, production of primary Aluminium metal has increased.
Significance of the development
- India is the 2nd largest Aluminium producer, 3rd largest lime producer and 4th largest iron ore producer in the world.
- Healthy growth in production of iron ore and limestone reflect the robust demand conditions in the user industries viz. steel and cement.
- Coupled with the high growth in Aluminium, these growth trends point towards strong economic activity in user sectors such as energy, infrastructure, construction, automotive and machinery.
- With the launch of the National Mineral Policy 2019 and the Mines and Minerals (Development and Regulation) Amendment Act 2021, India presents a major opportunity for investors looking to invest in the metal industry in India.
- Important Government schemes: Production Linked Incentives (PLI) Scheme, Make in India Campaign, Smart Cities, Rural Electrification, and a focus on building renewable energy projects under the National Electricity Policy
India abstains from UNHRC Gaza ceasefire resolution
Context
India abstained in the UN Human Rights Council on a resolution that called for an immediate ceasefire in Gaza and also demanded that Israel immediately lift its illegal blockade on the strip.
The Resolution
- The resolution demanded that Israel, the occupying Power, end its occupation of the Palestinian territory occupied since 1967, including East Jerusalem.
- It stressed that all efforts to end the Israeli-Palestinian conflict must be grounded in respect for international humanitarian law and international human rights law and relevant United Nations resolutions.
- The resolution also called for an immediate ceasefire in Gaza, for immediate emergency humanitarian access and assistance and for the urgent restoration of basic necessities to the Palestinian population in Gaza.
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Fact Box: United Nations Human Rights Council (UNHRC):
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RBI Monetary Policy
Context
The Reserve Bank of India’s Monetary Policy Committee unanimously decided to keep the key interest rates unchanged at 6.50 per cent for the seventh consecutive time. The policy stance is also maintained at ‘withdrawal of accommodation’.
Key Highlights
- Inflation is moving closer to targets. Retail inflation is projected for the current year at 4.5%. The RBI has been mandated by the government to maintain retail inflation at 4% with a 2% margin on either side.
- Core inflation has declined steadily over the last nine months while fuel component remained in deflation for six straight months.
- Indian economy is projected to grow 7% this financial year.
- Forex Reserve: India continues to remain the largest receiver of remittances with the country's foreign portfolio investment seeing a significant turnaround.
- The global economy has remained resilient and global trade is expected to grow faster in 2024.
Impact of the move
An unchanged repo rate means the loan interest rates too are likely to remain unchanged.
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Key-terms in the monetary policy review |
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Repo rate |
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Standing Deposit Facility (SDF) Rate |
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Marginal Standing Facility (MSF) Rate
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Fine Tuning Operations
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Monetary policy stance
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There are various stances:
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CPI Inflation
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UPI-based Cash Deposit Facility
Context
The Reserve Bank of India announced a proposal for a new UPI-based cash deposit facility.
About
- UPI has primarily been used for peer-to-peer transactions, bill payments, merchant transactions and other digital payments.
- Now, with the latest announcement, cash deposit at Cash Deposit Machines (CDMs) using UPI instead of needing an ATM/debit card will be possible.
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Fact Box: UPI
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RBI’s G-sec App
Context
The Reserve Bank of India (RBI) has announced the launch of a mobile application, the 'G-sec App', as part of its Retail Direct Scheme. This initiative aims to simplify the process of investing in government securities (G-Secs) for retail investors.
About
About G-sec App
- The G-sec App serves as a one-stop solution for retail investors looking to invest in government bonds and treasury bills.
- It provides a user-friendly interface for buying and selling securities, eliminating the complexities of traditional investment methods.
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Fact Box: Retail Direct Scheme
Government securities
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TERMS OF THE DAY
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S.No. |
Term |
About |
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1. |
Circular carbon economy |
A circular carbon economy is a framework for managing and reducing emissions. It is a closed loop system involving 4Rs: reduce, reuse, recycle, and remove. |
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2. |
Electric vertical take-off and landing (eVTOL) |
Electric vertical take-off and landing (eVTOL) aircraft take off vertically like a helicopter. The key difference is that they are powered by electric motors instead of conventional combustion engines. |
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3. |
National Airspace and International Airspace |
National Airspace only composes the land and territorial waters (i.e.: beyond 12NM). Airspace which is not within any country's territorial limit is considered as 'International Airspace'. |
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4. |
Territorial Waters |
Territorial waters, in international law, that area of the sea immediately adjacent to the shores of a state and subject to the territorial jurisdiction of that state. Territorial sea is defined under the UNCLOS as the 12-nautical mile zone from the baseline or low-water line along the coast. |
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5. |
Two-state solution |
Two-state solution is fundamentally about how or whether to split the country's territory between the Jewish and Arab populations. It means establishing two states for the people of two communities, that is, Israel for the Jewish people and Palestine for the Palestinian people. |
Editorial
Calling China’s Bluff
Context:
India’s response to China's attempts to rename geographical entities in Arunachal Pradesh and India's stance on the South China Sea dispute is an assurance for Manila and a warning for Beijing.
China's Renaming Efforts:
- Geographical Renaming: China initiated a series of efforts to rename places in Arunachal Pradesh, termed as "Zangnan" by China, starting in 2017 and continuing with additional renamings in subsequent years.
- Strategic Intent: China's renaming tactics reflect its long-term strategy of asserting territorial claims and using historical narratives as a tool for expansion and influence.
- Historical Claims: China's historical assertions, such as invoking figures like Zheng He and claiming ancestral graves in Arunachal Pradesh, demonstrate its utilization of history to justify territorial ambitions and influence public perception.
India's Response and Diplomatic Stand:
- Dismissal of Renaming Attempts: India firmly rejected China's renaming attempts in Arunachal Pradesh, emphasizing India's sovereignty over the region.
- Strategic Diplomacy: Indian External Affairs Minister S Jaishankar's recent visit to the Philippines signalled a departure from India's traditional non-interventionist stance by expressing support for the Philippines in the South China Sea dispute.
- Rules-Based Order Advocacy: India reiterated its commitment to a rules-based international order and adherence to UNCLOS 1982, calling on China to respect the 2016 Hague-based Permanent Court of Arbitration ruling invalidating its claims in the South China Sea.
China's Response and India's Position:
- Chinese Reaction: China responded predictably to India's stance, accusing India of seeking to embroil other nations in conflicts with China and warning of negative consequences for India-China relations.
- India's Responsible Role: India reiterated its commitment to peace, stability, and credibility in international relations, emphasizing adherence to a rules-based order and advocating for diplomatic resolutions to disputes.
- Mutual Expectations: India seeks similar commitments from China, as evidenced by recent communications between Indian and Chinese leadership, emphasizing the importance of peace, stability, and adherence to international norms.
Editorial
There will be no independent, sovereign Palestine
Context:
The ongoing Israeli-Palestinian conflict has drawn international attention due to escalating tensions and the potential for wider regional conflict.
Certainty of No Palestinian State:
- Diminished Prospects: Despite past negotiations and attempts to establish a two-state solution, the likelihood of an independent Palestinian state remains bleak.
- Erosion of Support: Support for a Palestinian state among Israelis has waned, exacerbated by the rising popularity of Hamas, a militant group opposed to Israel's existence.
- Credibility Crisis: The Palestinian Authority's perceived corruption and inefficacy have undermined its legitimacy, making the emergence of a moderate Palestinian government improbable.
Probability of Wider Conflict:
- Involvement of Regional Actors: The conflict's complexity is compounded by the involvement of regional actors like Hezbollah in Lebanon, which poses a significant threat to Israel.
- Escalation Risk: The conflict's potential to escalate into a broader regional conflict involving Israel, Lebanon, Syria, Iran, and possibly Egypt heightens the risk of instability.
- Continued Hostilities: Despite international efforts to secure a ceasefire, ongoing hostilities persist, driven by geopolitical dynamics and entrenched grievances.
Editorial
Holding the Rate
Context:
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) maintained the status quo on key policy rates in its first meeting of the financial year.
Committee Decision and Rationale:
- Policy Stance Retained: The MPC decided to keep the repo rate unchanged at 6.5% and maintained its policy stance focused on the withdrawal of accommodation.
- Inflation Concerns: Despite core inflation falling to 3.4% in February, elevated food prices contributed to the decision to remain watchful for upside risks to inflation.
- Disinflationary Policy: RBI Governor Shaktikanta Das emphasized the need for policy to remain "actively disinflationary" to anchor inflation expectations and mitigate potential risks to disinflation.
Inflation and Growth Outlook:
- Rising Food Inflation: Recent data showed an increase in consumer food price index to 8.66% in February, driven by higher prices in cereals, eggs, vegetables, pulses, and spices.
- Monsoon Expectations: Anticipated improvements in rainfall, with La Niña conditions forecasted, may alleviate food inflation concerns, providing clarity in the coming months.
- Growth Projections: RBI retained its GDP growth estimate at 7% for 2024-25, citing healthy momentum, particularly in private consumption and investment, despite lingering uncertainties.
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